Chicago has selected Boring Company, founded by Tesla CEO Elon Musk, to build a high-speed underground transportation system connecting the city's main international airport and downtown area, its mayor announced on Thursday afternoon.

The Boring Company will design, build, finance, operate and maintain the so-called Chicago Express Loop, a high-speed public transportation system in which passengers are transported on autonomous electric vehicles running through twin underground tunnels at 125-150 miles (200-240 km) per hour.

Each vehicle, build on the Tesla Model X chassis, will carry up to 16 passengers, plus their luggage, and will depart from O'Hare International Airport and from the city center as frequently as every 30 seconds. A ride will take 12 minutes, three to four times faster than the existing metro system.

"Bringing Chicago's economic engines closer together will keep the city on the cutting edge of progress, create thousands of good-paying jobs and strengthen our great city for future generations," Chicago Mayor Rahm Emanuel said at a joint press conference here with Elon Musk.

"This transformative project will help Chicago write the next chapter in our legacy of innovation and invention," he added.

The fare is estimated at 20-25 U.S. dollars, about half the price of a taxi ride, according to Boring Company.

Musk, who described the project as a revolutionary one, said they will start the drilling later this year once they get the final approval from the city.

Musk and his company will raise the funds for the project, which will not cost taxpayers a single penny, the mayor underlined.

Details of the project will be decided later through negotiations between the Boring Company and the City.